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Seven Charged in Health Care Fraud

The federal authorities in Dallas arrested a Texas doctor and six others Tuesday in a home health care scheme that the authorities said cheated the government out of nearly $375 million in Medicare and Medicaid fees. It was so brazen, they said, that it involved registering homeless people for home health care services they never received.

Prosecutors described the scheme as “staggering in its breadth and scope” in documents filed Tuesday in United States District Court in Dallas.

The authorities said the doctor, Jacques Roy, ran an association of health care providers that certified patients for home health care and performed home visits. Even though he had only four doctors and about 15 nurses on his staff, his company, Medistat Group Associates, is said to have certified more than 11,000 patients since 2006, more than any other practice in the United States.

“The magnitude is astonishing,” said Marcus Asner, who formerly oversaw health care fraud investigations as chief of the major crimes unit in the United States attorney’s office in Manhattan. “The numbers just keep getting bigger.”

Patrick McLain, Dr. Roy’s lawyer, said he read the indictment for the first time on Tuesday and had not seen enough evidence to comment on the case. However, he said Dr. Roy spent his days visiting patients and did not spend enough time running his office. “I think that’s the problem, is that he just wasn’t there,” Mr. McLain said. “If you don’t have honest, competent people, that’s the problem.”

The case against Dr. Roy and his associates is the most recent of several large investigations by the Department of Justice aimed at cracking down on Medicare fraud. Last year, the owner of a mental health care corporation in Miami was sentenced to 50 years in prison after pleading guilty to billing Medicare for treatments that were not necessary or never provided.

Since 2009, Medicare fraud strike forces — teams that are run by the Department of Justice in nine locations around the country — have charged more than 800 defendants with fraud totaling more than $2.2 billion, according to department officials. The case represents the largest fraud amount orchestrated by a single doctor in the history of the Medicare strike force operations, federal officials said.

The Texas case grew out of new computer analysis techniques aimed at singling out suspicious patterns and investigating them for criminal activity. Dr. Roy’s billing practices caught the attention of two teams of investigators at the Centers for Medicare and Medicaid Services, who eventually turned the case over to law enforcement.

Mr. Asner, who now defends health care providers, including some who have been accused of fraud, said the temptation to cheat is strong. “It’s just a big area where there is a lot of money floating around, and controls are sometimes difficult to implement,” he said. But recently “law enforcement is learning what the bad guys are doing and attacking it better,” he added.

In the indictment unsealed Tuesday, the authorities said Dr. Roy and his associates had certified patients for home health services even though they were not needed, then billed the government for additional unnecessary services. Working with home health agencies, his associates would go door-to-door in some neighborhoods to recruit patients, the authorities said. In one case, an associate of Dr. Roy’s is said to have offered $50 to recruiters for each new beneficiary they signed up at a local homeless shelter.

Medistat had a “boiler room” where employees spent the day placing Dr. Roy’s signature on approvals for home health services, the authorities said. “The defendant spearheaded a wide-ranging fraudulent scheme that resulted in massive losses to Medicare and Medicaid programs,” prosecutors said in a court document asking that Dr. Roy be detained.

In June 2011, the Centers for Medicare and Medicaid Services froze Dr. Roy’s Medicare payments after receiving what it considered enough evidence of fraud, but Dr. Roy shifted his business to another company and continued operating, the authorities said.

Dr. Roy and his associates have each been charged with one count of conspiracy to commit health care fraud. Dr. Roy is also charged with nine counts of substantive health care fraud.

A version of this article appears in print on February 29, 2012, on page A18 of the New York edition with the headline: Seven Charged in Health Care Fraud. Order Reprints|Today's Paper|Subscribe